Marin Clean Energy critics object to forced opt-out

Pacific Gas and Electric Co. and other critics of the Marin Clean Energy initiative assert that it is unfair customers must opt out just to stick with PG&E, but supporters note the opt-out requirement is prescribed by the state law that makes the program possible.

Under that legislation, AB 117, the Marin Energy Authority, which is sponsoring the Marin Clean Energy program, is allowed to market only to customers who in live in the unincorporated portions of Marin County or one of the other six municipalities that belong to the joint powers authority: San Rafael, Mill Valley, Sausalito, San Anselmo, Belvedere and Fairfax. Residents who live in other areas of Marin will not have the option of participating in the program, even if they want to.

In February, a group of former Mill Valley council members called the opt-out feature unfair in a letter they issued urging the Mill Valley City Council to reconsider its decision to participate in the Marin Energy Authority.

"There is no vital health and safety reason that sufficiently justifies placing the burden on Mill Valley residents to affirmatively opt out of a project that embodies financial hazards, is filled with uncertainties and complexities, and is likely to be confusing to the average citizen and might not be fully understood by many," the letter stated.

But Marin Clean Energy supporters point out that the opt-out procedure is specified in AB 117, the 2002 state law that authorized community choice aggregation projects in California.

The law states: "Under community choice aggregation, customer participation may not require a positive written declaration, but all customers shall be informed of their right to opt out of the community choice aggregation program. If no negative declaration is made by a customer, that customer shall be served through the community choice aggregation program."

This opt-out approach has been used in other states, such as Ohio and Massachusetts, where community choice aggregation legislation has been adopted, said Robert Freehling, a research director with Oakland-based Local Power Inc., which helps public authorities create and manage community choice aggregation projects.

Freehling said one of the main reasons deregulation of the electrical market in California failed in 1996 is that the cost of marketing to residential and small commercial customers was too high. The energy suppliers who tried to compete with PG&E and other investor-owned utilities had to "go door-to-door and pick up one customer at a time," Freehling said.

"That's why in 2000 and 2001 a lot of the suppliers just walked out of the state," he said. "The transaction costs of giving individual customers a choice is just too high."

A Marin County civil grand jury issued a negative appraisal of Marin Clean Energy in December. In that report, the grand jury wrote, "As noted by multiple studies, this project is dependent upon the automatic transfer of all customers. The participation level that is critical to success may not be achieved if the consumer is required to opt-in."

The grand jury referred to a New York Times article published on Nov. 17, 2009, that reported the sign-up rate for alternative renewable programs run by utilities nationally is only about 2 percent.

PG&E offers its customers the opportunity of paying a little more each month, less than $5 for most residential customers, to pay for projects to cut greenhouse gas emissions under its Climate Smart program. Only about 30,000 of the utility's 5 million customers participate, said PG&E spokeswoman Katie Romans.